Tax Planning - Avoidance or Evasion?

Every citizen is entitled to arrange their affairs in any way that minimizes their tax burden. There is no obligation to pay more tax than the law provides. It is perfectly legitimate to regard the entire tax regime as amoral. The corollary is that the Government should have no right to extract unnecessary amounts of cash from the citizens it is supposed to serve.

Within this context we can see plenty of scope for argument on both sides of the divide.

Whilst not fazed by the propaganda war being waged by HMG through HMRC and the media we do have substantive concerns about some of the more aggressive schemes currently being promoted.

Many of the schemes are legitimate, and contrary to what HMRC assert, many of them work. But there is a more corrosive consequence unfolding in the background and that is to do with our profession's reputation. Some time ago, it would have been normal to "Trust the Police"; "Like The Americans"; "Believe our Leaders"; "Trust our teachers, doctors, bank managers and accountants". That may have been the default position less than 40 years ago but for many reasons this may no longer be the case. We suggest one of the main reasons is the frequency with which trust has been abused and good manners and common courtesy has been taken advantage of all in the name of getting ahead or excused by saying "it's just business".

We believe that some of the schemes being promoted by the more aggressive end of tax planning will in due course undermine the instinctive and justifiable trust placed in the accountancy profession and that matters, because in the end the client won't know on whom they can rely or who to believe. The result will be the break down of long term relationships and the rise of short-termism in yet another of life's arenas. You can tell by now that we don't really embrace that as a fundamental good.

We stay abreast of as many tax avoidance schemes as we can so that we can discuss their pros and cons with you with some intelligence and experience. We will point out the risks and potential rewards and especially highlight the ones which require articulate technical linguistic defence of the indefensible to succeed. We will steer you towards methods and opportunities to legitimately avoid tax, and many of our proposals are much more effective, cheaper to administer, and less prone to revision than some of the wacky ideas out there.

We will always explain the risks to you. Where you want to rely on specific schemes, you must get the advice in writing and probably take independent legal advice as to their efficacy. Every scheme is different - if only in the highly specific wording that is used in their documentation.

We will take the long view that it is more valuable to you to have someone helping you to do right versus what is merely expedient. In the main when drawing the line as to where we stand, we can help you by structuring your affairs so that you pay tax on the money you use in the UK. More or less everything else can be ring fenced, rolled up tax free, and extracted tax efficiently at a later date.

We'll explain why we think various schemes will fail and if you'll allow us, we may show you a better more effective way. Seductive as the attraction of paying less tax than you neighbour may seem, you may well pay in other ways.

Second Opinion

If you want an unbiased view or explanation of any scheme that appeals to you then please contact us. Whether you are a client or not we will run all the numbers exactly as they apply to you, so you can make your own mind up. It won't surprise you to learn that many promoters are tempted to draw your attention only to the savings you might make on a particular tax, and conveniently ignore the additional risks you will be taking on or the additional taxes you will be liable to elsewhere. If you are considering making a substantial investment and wonder whether the tax-saving tail is wagging the dog get us involved. It will put your mind at rest that you are making the right decision, or if you feel you have been backed into a corner we can get you out again without losing face.